How did you get your number?

[Rdy2Fire]

Someone told me that they feel they can retire when they can generate 150-200K a year. They had no TOTAL number other then that, seemed insane.

Given I am still questioning my current FIRE'd decision(s) wondering what people's numbers are or more so how they came up with them if it wasn't just 25X annual expenses.

[Buffaloski Boris]

I don’t have a set number. I’m in it for Financial Independence or financial freedom or whatever we want to call it. To me that’s the ability to pick up and walk away from a job or toxic personal situation or whatever life is likely to throw and persevere long term. I’m also in a pension scenario that will largely or entirely allow me to retire when and if I decide to.

Ironically I m one of the more conservative FI folks. I disagree with the 4% “rule.”

[terran]

...if it wasn't just 25X [planned/expected] annual expenses.

That's how you come up with your number, so no sense in discussing other ways to go about it.

Of course, there's the whole "is it 20x, 25x, 30x, 33x, 50x, etc?" debate, but it's all pretty close, so just just keep saving and, as you get close, refine your expected expense estimates and read up on withdrawal rates and methods.

[A Fella from Stella]

Based on lifestyle. What income do you want while you have minimal expenses?

Or, do you want to maximize your expenses? For example, are you traveling by private jet, or do you not even own a car?

[Rdy2Fire]

Sorry I wasn't clear.. I have mine and I have more then the 25X  (I am still questioning the possibility of staying FIRE'd vs taking a gig)

It was more a curiosity question as to how people came up with theirs, the 25X, some random number, etc?

[DadJokes]

I look at my past and current expenses, project out 12 months, and multiply by 25-30. I will also have to reassess periodically, due to inflation and life changes. Really, the number is only giving a general idea. It's the number I would need if I were to retire today, but it won't be the same number a decade from now when I am ready to leave my 9-5.

[MonkeyJenga]

I assumed 25x expected expenses, but I worked longer for various reasons. I'm below a 3% WR now. I have a long time for emergencies to crop up and healthcare in the US to change for the worse. Even if I wanted to spend more day to day, I'm keeping the extra as a buffer. Really there's no way to calculate "25x expenses and ???? for 5 decades of healthcare."

[Rdy2Fire]

I assumed 25x expected expenses, but I worked longer for various reasons. I'm below a 3% WR now. I have a long time for emergencies to crop up and healthcare in the US to change for the worse. Even if I wanted to spend more day to day, I'm keeping the extra as a buffer. Really there's no way to calculate "25x expenses and ???? for 5 decades of healthcare."

Healthcare has always been my biggest concern honestly when I look at my own numbers

[Laserjet3051]

Dont have a number as a projected "target number" would be virtually impossible for me to hit (or even come close) given my age and the average lifespan for my demographic. That said, I'll feverishly pump my accounts as much as is feasible in an effort to achieve some semblance of FI and some humane facsimile of a traditional retirement (age).

[2Birds1Stone]

I realized that I could live a very awesome life ~$18k/yr, so would need ~$500-525k in invested assets to generate that.

With such low spending, even a PT or seasonal job here and there would prevent financial ruin if bad sequence of returns or other prolonged negative investment scenario played out.

YMMV.

[Rdy2Fire]

So it seems most just use the 25X rule and aren't randomly pulling a number out of their arse

[Rdy2Fire]

So it seems most just use the 25X rule and aren't randomly pulling a number out of their arse

I think that's true around here but the 25 x expenses is often coupled with counting on other future income sources too - pension, SS, job, etc. - to offset that amount. Also 25x your expenses may be vastly different then 25 x someone else's expenses. In my case I could easily. live on under $1000/month even without any other income source as long as I had a low cost paid off place And medical. But I like to travel or do other things so live on a bit more than double that amount now with 50% to 75% gping to fun stuff like travel.

I get it.. I personally used 30x not even taking SS into consideration the person I spoke of in the original post just seemed to pull a number from thin air hence I was curious how people got theirs

[Loren Ver]

I got our number very differently.  Back when I was in college and DH (then boyfriend) was out of college and working as a middle school teacher, I told him that if he invested wisely he could retire by the time he was 40.

Fast forward to 2019, DH and I retired a little over a month before he turned 40, right on time :).

I picked 40 because that is how old my dad was when he retired so I know it was possible.  It is extra cool since i am the younger spouse, so I didn't have to wait so long :).

[Rdy2Fire]

I got our number very differently.  Back when I was in college and DH (then boyfriend) was out of college and working as a middle school teacher, I told him that if he invested wisely he could retire by the time he was 40.

Fast forward to 2019, DH and I retired a little over a month before he turned 40, right on time :).

I picked 40 because that is how old my dad was when he retired so I know it was possible.  It is extra cool since i am the younger spouse, so I didn't have to wait so long :).

Awesome I actually said 50 and I didn't have a number in mind.. I FIRE'd, unintentionally, a few months ago, right before my 48th B'day but now considering a job :( or :) depending on how you look at it; I'm not sure myself

[FIRE 20/20]

For me:
Step 1 - Carefully tracked expenses over the course of a full year.  Researched reasonable rates for things like car repair, home maintenance, health care inflation, and other costs that might not have been included in 1 year's expenses.  Over the course of the year, my partner and I discussed priorities, desire to help family, contribute to charity post-FIRE, etc.  The end result of this step was an annual spending number that we both felt comfortable with, along with a detailed list of prioritized spending cuts if the SHTF.  At the end of the tracking year we were on the same page and had a documented plan that we both understood and were comfortable with.
Step 1a - In parallel to Step 1, I read SWR research - things like the updated Trinity study, BigERN's posts, ran CFireSim and FIRECalc scenarios, etc. to get to a withdrawal rate I felt comfortable with. 
Step 2 - Researched Roth Ladder and rule 72(t).  I built a plan to get us through the first 5 years, then to 59 1/2, then to 65 (pensions), 70 (SS), and long-term care.  If the one big number was good but it didn't support one of those time-frames then the overall plan won't work. 
Step 3 - I educated myself on pension and SS rules, funding levels, etc. to see whether or not I wanted to include them in my planning and at what level.  Ultimately I decided that if things were so bad that our plan failed without them then it's possible they could fail or be reduced as well, so we decided not to include them even though at 70% they would cover 100% of our planned expenses from 70+ excluding long-term care. 
Step 4 - I looked into ACA rules to figure out health care costs in a few scenarios - as-is (with Cost Sharing Reductions), without CSRs, without any subsidies, ACA collapse, etc.  I also calculated the taxes we would pay based on each of those scenarios, because need more income each year as health care costs rise.
Step 5 - Used the above information to create an annual and overall number along with a table of my Roth conversion ladder.  This included my accessible funds, the Roth ladder contributions, and starting 5 years out the addition of the ladder funding.  I did this to ensure that we could make it to 59 1/2.
Step 6 - Calculated what we had in each bucket (accessible funds, 401(k)s, etc.).  Looked at where we were short and developed a plan to fill in the shortfalls.
Step 7 - Hit the numbers - 25x annual budget along with sufficient money for the first 5 years until the ladder rungs kick in (Yay!!!). 
Step 8 - Funded Donor Advised Fund.
Step 9 - Downshifted to part-time and worked one more low-stress year with tons of vacation time.  I don't think this is necessary for everyone, but my job is such that after my certifications expire I won't be able to return to work in my career field.  Working OMY, ignoring the pensions and SS, and having a FatFIRE budget with agreed-upon spending cuts should combine to make the plan fairly safe. 

[Loren Ver]

I got our number very differently.  Back when I was in college and DH (then boyfriend) was out of college and working as a middle school teacher, I told him that if he invested wisely he could retire by the time he was 40.

Fast forward to 2019, DH and I retired a little over a month before he turned 40, right on time :).

I picked 40 because that is how old my dad was when he retired so I know it was possible.  It is extra cool since i am the younger spouse, so I didn't have to wait so long :).

Awesome I actually said 50 and I didn't have a number in mind.. I FIRE'd, unintentionally, a few months ago, right before my 48th B'day but now considering a job :( or :) depending on how you look at it; I'm not sure myself

:D

[Cadman]

I think having an honest annual spend figure has a bigger impact than niggling between 4%, 5%, etc. While I didn't discover this site until 5 years ago, I had 15 years of tracked expenses to fall back on in my spreadsheet. It's easy to say, "I could live on 20k a year" after totaling utilities, groceries, insurance and the other big hitters, but when you average out years' worth of data, it's obvious the little things really add up, especially if you have hobbies or enjoy home improvement.

[2sk22]

I think having an honest annual spend figure has a bigger impact than niggling between 4%, 5%, etc. While I didn't discover this site until 5 years ago, I had 15 years of tracked expenses to fall back on in my spreadsheet. It's easy to say, "I could live on 20k a year" after totaling utilities, groceries, insurance and the other big hitters, but when you average out years' worth of data, it's obvious the little things really add up, especially if you have hobbies or enjoy home improvement.

I used a very similar method. I do keep track of expenses very carefully so I have some confidence in my numbers.

That's the backward looking analysis which is very important. It also helps if you have a good idea about known unavoidable or planned  future expenses.

[Altons Bobs]

I've been tracking our expenses for the past few years, and then I used several conservative calculators to make sure our numbers would work. I also don't believe 25x is good enough for a long retirement. When we retire, we don't want to work anymore, so we'll only be relying on our passive investment income and nothing else. No pension, and I don't figure in SS since our salaries have been low. Can't retire yet because of health insurance.

[oldtoyota]

I assumed 25x expected expenses, but I worked longer for various reasons. I'm below a 3% WR now. I have a long time for emergencies to crop up and healthcare in the US to change for the worse. Even if I wanted to spend more day to day, I'm keeping the extra as a buffer. Really there's no way to calculate "25x expenses and ???? for 5 decades of healthcare."

Same here.

Healthcare has always been my biggest concern honestly when I look at my own numbers

[bmjohnson35]

1. Became debt free when we sold our last house.
2. Downsized to lower cost home and paid cash.
3. Tracked cost of living in new home (18 months of actual expenses so far).
4. Used online ss estimator at ss website to identify future payments for myself and my spouse.
5. Obtained estimates from pension company for various termination dates with starting to collect at age 55.
6. Developed spreadsheet that used existing known costs with a 3% escalation rate.  Forecasted annual costs through age 62.
7. Once we identified the guidelines for fully leveraging ACA subsidies, used above spreadsheet to forecast best mix of income sources, including cash, IRA accts, pension, ss, and other investments to stay within target MAGI.
8. Made sure forecast left main retirement acct untouched for the at least 10 years.
9. We are still aligning our investments with the above in mind.
10. Added several big ticket cost risks into spreadsheet (Car purchase, Major repairs, Exceeding MAGI target, etc.)
11. Added some contingency for potential downturn of economy, resulting in reduction investment balances.

Following doing the above, I also used popular online Fire calculators as additional cross check.

Hope to pull trigger early 2020.

Bj

[Steeze]

25x future expenses which is about 40x current expenses.

Future expenses include additional unsubsidized health insurance, additional travel, owning a car, and end of life care

Also don’t plan to FIRE necessarily - More focused on the FI part. Won’t ever have a W2 again though.

[mistymoney]

25x future expenses which is about 40x current expenses.

Future expenses include additional unsubsidized health insurance, additional travel, owning a car, and end of life care

Also don’t plan to FIRE necessarily - More focused on the FI part. Won’t ever have a W2 again though.

Any details on this? Love to hear how people are approaching this.

[mistymoney]

I've been tracking our expenses for the past few years, and then I used several conservative calculators to make sure our numbers would work. I also don't believe 25x is good enough for a long retirement. When we retire, we don't want to work anymore, so we'll only be relying on our passive investment income and nothing else. No pension, and I don't figure in SS since our salaries have been low. Can't retire yet because of health insurance.

What multiple are you using? Can you share how you determined that?

[MrThatsDifferent]

For me I created a budget for when I FIRE, not my budget now. I plan on living a different life than now. Then I had two options, a fully funded RE life or a p/t FE life. So if you plan on working then you subtract what you’ll earn from the number you use for your budget and then multiply by 25. I did read that although 25x expenses is good, 33x will ensure almost 100% success under most conditions, so you can use that number too.

[TempusFugit]

I think having an honest annual spend figure has a bigger impact than niggling between 4%, 5%, etc. While I didn't discover this site until 5 years ago, I had 15 years of tracked expenses to fall back on in my spreadsheet. It's easy to say, "I could live on 20k a year" after totaling utilities, groceries, insurance and the other big hitters, but when you average out years' worth of data, it's obvious the little things really add up, especially if you have hobbies or enjoy home improvement.

I think this is the most important point.  Unfortunately it is also perhaps the most difficult aspect to really nail down with any confidence for those of us in the US where future healthcare spending is such an unknown. 

I've tracked my spending for the past couple of years and am pretty consistent in my spending habits now, but I really wonder how much things would change if I weren't working.  Estimating what you will spend under different life circumstances is a tricky thing. 

Whatever spend number you use as the basis for your calculation, whether your multiplier is 3% or 4%, I think it is only sensible to be sure your base number includes a little bit of headroom for cutting back if times get lean. Just knowing that you 'could' cut back would be a stress reliever, I think. 
 
My current number for planning purposes is based on:
- My last 2 years of spending (which is hardly deprivation level) adjusted to account for expected home/auto maintenance issues on an annual basis
- Current ACA silver policy rates with no subsidies, rounded up 
- I round up to the next 5K on the annual total 
--------------------------------------------------------> this is my annual spend number used for 4% multiplier

Then
- Add in any remaining balance on my mortgage at the projected FIRE date
- Add 25K for expected vehicle replacement

I will continue to adjust my spending projections based on my real spending each year. I've got 3-5 more years before I pull the RE plug.   

[Altons Bobs]

I've been tracking our expenses for the past few years, and then I used several conservative calculators to make sure our numbers would work. I also don't believe 25x is good enough for a long retirement. When we retire, we don't want to work anymore, so we'll only be relying on our passive investment income and nothing else. No pension, and I don't figure in SS since our salaries have been low. Can't retire yet because of health insurance.

What multiple are you using? Can you share how you determined that?

Not really using a multiple. 25x works most of the time for a 30-year retirement and beyond that who knows?! I look at our annual expenses, and I don't see us changing our lifestyle, so the retirement income has to be the same or above what we currently spend. I feel more comfortable with a cushion, or a couple of cushions. :-D I just can't find a health care solution yet, otherwise I would have retired long time ago.

[Steeze]

25x future expenses which is about 40x current expenses.

Future expenses include additional unsubsidized health insurance, additional travel, owning a car, and end of life care

Also don’t plan to FIRE necessarily - More focused on the FI part. Won’t ever have a W2 again though.

Any details on this? Love to hear how people are approaching this.

For me I will like to set aside a couple months a year to slow travel. Perhaps splitting my time between my home, my in-laws in China, my parent’s (if they don’t live near me), and some new location for a 2-3 month stay. When I am stateside I plan to buy a home or multi family to renovate and rent out - perhaps one every couple of years if I can swing it. Something more like a hobby that will continue to build wealth, improve cash flow, keep me active and learning, but can be seasonal and passive when I am not around. I would also consider consulting in my field if it was project based, i was contracted directly, and it could be 100% remote.

[Bloop Bloop]

I took our current yearly expenses as a couple, multiplied it by 1.75 to factor in the costs of children, multiplied that figure by 33 as a conservative amount, then added $1.5m for the cost of a primary home (which is about 1.75x what the median home costs in my area). So my final figure is 100x current annual expenses. If I used the 25x, I could have FIREd already, but I wouldn't have the lifestyle I want. I think I could probably sustain the lifestyle I want even at 50-66x current expenses, but I like the feeling of having fat left over for various indulgences, travel, etc.

[Zamboni]

I don't really have a number, instead I have a graph. It's the old school Your Money or Your Life graph. When my monthly income from investments line crosses my monthly expense line . . . and it seems like that will be a long term thing and those lines will not criss-cross back . . . then I'll be done working for the money.

[BTDretire]

I started reading MMM blog then forum just over 4 years ago.
 I was older at the time 60! but it got me thinking about FIRE.
It was not to long and I found Firecalc, and put it some numbers.
At first I just put in $40k as income, (because that's what is thrown around a lot here),
and our stash number. That was always successful. After a while--too long, I found the other tabs,
and added more info, including receiving SS at 70 for both the wife and I. Then I finally figured out
to adjusted the income up until I had a failure. That number was twice what our spending was.
 Not all quite as rosy as that seems, as we still have two kids in college, one very expensive college.
But, there is plenty to cover that and still have more than we need.
 So on Jan 1, 2018 I started working only 1 day a week in our business and my wife not wanting to retire took up all the slack. Then on Oct. 10th hurricane Micheal destroyed our business and I had no desire to rebuild and I over the 8 months I got the wife to realize she didn't need to work, so it was easy for her finally give it up.
 So, for us it was Firecalc that convinced me and a Hurricane that forced the issue, the tragedy was a positive in that one respect.    https://www.firecalc.com/

[Omy]

DH and I could have retired 5 years ago based on a 3% swr, but we didn't trust that number because of the big health care unknown. So we "one more yeared" ourselves for 5 more years and doubled our net worth. At this point, we could completely get out of the stock market and it would take 60-70 years to draw down the cash (without even considering what we will get from social security).

Realizing that...and seeing all of the success stories on this site...and getting a few face punches for over saving helped me realize that we had "enough". The Rich, Broke, Dead calculator confirmed this with a great visual - and made me realize that impending death (not poverty) should be my bigger concern.

While we may have "wasted" five years by continuing to work when the math said we were fine, I have complete peace of mind as we FIRE this month. Ultimately, "peace of mind" is what I needed to get to my number.

[brooklynmoney]

I took my current spending (consistent over last decade of tracking) and added 20k for healthcare and property taxes (my current taxes are artificially low) and multiply by 25. If people don’t have some source for guaranteed HC like retiree medical etc I don’t understand how a very lean FIRE works especially at young ages. At least in the US.

[frugaldrummer]

I have 401k, social security and a pension to take into account, so it's not a simple "number". Due to an unwanted divorce in my early 50's I'm not retired early, but I could retire today (at 63) if I wanted. I continue to work because I enjoy my profession, I'd like to retire at my current spending level (which still has plenty of fat that could be cut in a bad year), and I'd like to give my three grown children a leg up. It's very comforting though to know that if I had to retire tomorrow I'd be fine, just would have to be a bit more frugal. I wish I knew my ex-husband's current income as my pension is a portion of his - I know what he made when we divorced, just don't know how much it has increased since - but since I prefer to have minimal contact I'm simply using a conservative estimate and waiting until he retires to find out exactly how much.

[Omy]

I took my current spending (consistent over last decade of tracking) and added 20k for healthcare and property taxes (my current taxes are artificially low) and multiply by 25. If people don’t have some source for guaranteed HC like retiree medical etc I don’t understand how a very lean FIRE works especially at young ages. At least in the US.

It's much easier when you are younger because if it doesn't work out, you have decades in front of you to start a new career or continue the one you left. I FIREd (the first time) at 35 with $800k and didn't think twice about it. I didn't work for 7 years, but when I got divorced and divided the net worth in half I decided it was time to get a job. Fast forward 15 years and with husband number 2 (both in our 50s), we have a way larger stash and a lot more anxiety to overcome because we are at the top of our earning potential, the fire hose of cash is pouring in, and it will be much more challenging to pop back into the job market should we decide we need to.

[Cannot Wait!]

I loaded up my Optimism Gun and took a flying leap. 

[elaine amj]

I got our number very differently.  Back when I was in college and DH (then boyfriend) was out of college and working as a middle school teacher, I told him that if he invested wisely he could retire by the time he was 40.

Fast forward to 2019, DH and I retired a little over a month before he turned 40, right on time :).

I picked 40 because that is how old my dad was when he retired so I know it was possible.  It is extra cool since i am the younger spouse, so I didn't have to wait so long :).

Awesome I actually said 50 and I didn't have a number in mind.. I FIRE'd, unintentionally, a few months ago, right before my 48th B'day but now considering a job :( or :) depending on how you look at it; I'm not sure myself

That's awesome! You got the idea very young then - perfect time.

I am much younger than my husband too :)

For me, I played with FIREcalc and cFIREsim but finally I had to break it down to simple math I could understand to feel comfortable.

I used a bucket allocation method. Split up my life from present to 100 years old into 10 year "buckets" . Guesstimated how much I needed for each "bucket" (subtracting pensions and social security) and calculated a present value from there. Added it up and there was my total. It wasn't too far from 25x expenses lol.

I FIREd last year and surprised myself by not stressing over every penny. I also stopped the endless number crunching I did for years. We are hopeless at expense tracking and have given up. We buy what we need or value when we need it and just make sure there is enough in the bank account at the end of the day. It has now been 8 months and I really should take a peek. The only nunber we track is our net worth once a year so as long as that looks good, I guess we just won't worry.


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[aceyou]

My wife and I both get pensions at 48yo, in 2031.  We have decided to live off approximately 50% of our paycheck until then and invest the rest, and that's been going well.  My guess is that we'll have around 1.5-2.5M in investments and about 100k/year in pensions and a paid off house when that date comes.  This is certainly far more money than we will need.

How did we get those numbers?  Well, the pension system we are in gives us a pretty strong incentive to make 2031 our date, and our current savings rate just happens to have us on track for those numbers. 

On one hand we could easily spend even less and still be totally happy.  On the other hand we could spend even more and still be completely FI by 2031.  We just take every spending decision as it comes and do what seems best.  Most of our extra spending right now is on traveling to cool places with our 4 and 7 year old so they see more and more of our country, and in a few more years the world. 

Our jobs are currently very rewarding (I'm a math teacher, she's an administrator) and we feel we are positively helping our community.  If the job became less rewarding we could absolutely bail on the full pension and FIRE in 7 or 8 years IMO.  Highly doubt we will, but our frugality gives us the flexibility. 

I don't know if that's the info you are looking for, but that's basically how my wife and I reasoned our way to our FIRE date and numbers.

[brooklynmoney]

[quote author=Omy link=topic=106935.msg2431860#msg2431860 date=1564946620

It's much easier when you are younger because if it doesn't work out, you have decades in front of you to start a new career or continue the one you left. I FIREd (the first time) at 35 with $800k and didn't think twice about it. I didn't work for 7 years, but when I got divorced and divided the net worth in half I decided it was time to get a job. Fast forward 15 years and with husband number 2 (both in our 50s), we have a way larger stash and a lot more anxiety to overcome because we are at the top of our earning potential, the fire hose of cash is pouring in, and it will be much more challenging to pop back into the job market should we decide we need to.
[/quote]

I for sure hear you on being older and having a firehose of cash that’s scary to turn off as it’s much harder to turn back on again if it all. I’m also very risk adverse.

[freya]

Ready2Fire, the answer probably depends on your age.

I'm in my 50s so I calculated mine similarly to some of the other posters, with planning for "life stages".  I have a core stash for age 70 when I start taking SS, and a "spend-down" stash for the years in between.  At my age I'm cognizant of how important it is to be able to take the time to enjoy life and do the things I can't do while working - before it's too late.  I therefore decided not to ignore SS, which a younger person would probably be wise to do.   On the other hand, a younger person could more easily plug shortfalls with part time or temporary jobs.

For projected annual expenses, I took my current expenses minus work-related costs, added my expected costs for medical insurance (planning for a high-cost option not Obamacare) and travel/new hobbies (I put down $400/month), then added 20% of non-mortgage expenses to this total, and finally another 10% to cover income taxes.  If something expensive happens, I'll have that 20% plus the $400/month to draw on.

I then estimated how much it would cost to cover 5 years of round the clock home care followed by 5 years in a nursing home.  Why did I do that?  Because every woman (4 of them so far) in my family, on both sides, developed Alzheimer's by age 80 with a rapid decline, but unfortunately not rapid enough to avoid being completely dependent long term.  I figure my stash should be spent down to cover the home care, then the sale of my home will cover the nursing home costs.   (Sorry for the morbid thinking on this.)

Last question is how to determine safe withdrawal rate for the core stash, and a safe spend-down rate for the spend-down stash.  You can plug in numbers for your portfolio and see the historical safe withdrawal rates on this site:

https://portfoliocharts.com/portfolio/withdrawal-rates/

The results may surprise you.  Stable performance turns out to be considerably more important than total gains, especially early on.   Because I use a very stable portfolio, I could actually go with a 5% SWR and be perfectly fine.  I'm using a 4% SWR, and I'm very comfortable with that.

Last step for me was to run my retirement spending & income through cfiresim and firecalc.  Gratifyingly, these numbers are close to the number I came up with using my staged calculation.   I then use all this data to come up with a final goal number.

Who knows what will happen when I get to it though.  For right now, I just want it in my back pocket to give me the option to call it quits, or at least to consider things like going part-time or cutting back on some responsibilities in exchange for lower pay.  Maybe later it will become imperative to quit, or given the freedom to quit I'll suddenly start enjoying the job more because I'll be completely immune to all the b-s stuff that freaks most people out.  That's already happened to a degree.  It's fantastic.

[Omy]

I'm super risk adverse, brooklynmoney. But I didn't think it was risky at all when I retired (the first time) at age 35. Our portfolio even dropped from $800k to $600k in the first year or so, and I didn't worry because our expenses were so low (and knew it would be easy to jump back into the job market if necessary).

I've done nothing but worry about health care for the past 5 years. Worrying literally delayed our plan that long. Now I have enough to self insure a major illness or pay several thousand a month for health insurance for the next 12 years until we both qualify for Medicare. That was how I got over my fear and realized we finally had enough.

The older I get, the more I understand my mortality. On the one hand, I want to enjoy the years I have left and not work until I die. On the other hand, I don't want to bankrupt my family should I get sick. Thank goodness the former finally won out. DH's last day was Friday and mine won't be far behind.

[Rdy2Fire]

I am much younger than my husband too :)

For me, I played with FIREcalc and cFIREsim but finally I had to break it down to simple math I could understand to feel comfortable.

I used a bucket allocation method. Split up my life from present to 100 years old into 10 year "buckets" . Guesstimated how much I needed for each "bucket" (subtracting pensions and social security) and calculated a present value from there. Added it up and there was my total. It wasn't too far from 25x expenses lol.

I FIREd last year and surprised myself by not stressing over every penny. I also stopped the endless number crunching I did for years. We are hopeless at expense tracking and have given up. We buy what we need or value when we need it and just make sure there is enough in the bank account at the end of the day. It has now been 8 months and I really should take a peek. The only nunber we track is our net worth once a year so as long as that looks good, I guess we just won't worry.


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elaine amj

I guess I started thinking about it young or not really thinking about it as much as wanting to be debt free. I didn't plan to "FIRE" really but happened recently and still debating if I will be taking a job or not. I wasn't looking for advice per say on how to get my number just curious how people got theirs so this is all pretty interesting.

I am OK at tracking my expenses but never really needed to or felt the need so this is where, although I understand my numbers, worry. That and of course the every looming healthcare and the last few days, especially today, what's happening with the markets as I am losing a lot of value but not much I can do about it but hold on.

[Rdy2Fire]

Ready2Fire, the answer probably depends on your age.

I'm in my 50s so I calculated mine similarly to some of the other posters, with planning for "life stages".  I have a core stash for age 70 when I start taking SS, and a "spend-down" stash for the years in between.  At my age I'm cognizant of how important it is to be able to take the time to enjoy life and do the things I can't do while working - before it's too late.  I therefore decided not to ignore SS, which a younger person would probably be wise to do.   On the other hand, a younger person could more easily plug shortfalls with part time or temporary jobs.

For projected annual expenses, I took my current expenses minus work-related costs, added my expected costs for medical insurance (planning for a high-cost option not Obamacare) and travel/new hobbies (I put down $400/month), then added 20% of non-mortgage expenses to this total, and finally another 10% to cover income taxes.  If something expensive happens, I'll have that 20% plus the $400/month to draw on.

I then estimated how much it would cost to cover 5 years of round the clock home care followed by 5 years in a nursing home.  Why did I do that?  Because every woman (4 of them so far) in my family, on both sides, developed Alzheimer's by age 80 with a rapid decline, but unfortunately not rapid enough to avoid being completely dependent long term.  I figure my stash should be spent down to cover the home care, then the sale of my home will cover the nursing home costs.   (Sorry for the morbid thinking on this.)

Last question is how to determine safe withdrawal rate for the core stash, and a safe spend-down rate for the spend-down stash.  You can plug in numbers for your portfolio and see the historical safe withdrawal rates on this site:

https://portfoliocharts.com/portfolio/withdrawal-rates/

The results may surprise you.  Stable performance turns out to be considerably more important than total gains, especially early on.   Because I use a very stable portfolio, I could actually go with a 5% SWR and be perfectly fine.  I'm using a 4% SWR, and I'm very comfortable with that.

Last step for me was to run my retirement spending & income through cfiresim and firecalc.  Gratifyingly, these numbers are close to the number I came up with using my staged calculation.   I then use all this data to come up with a final goal number.

Who knows what will happen when I get to it though.  For right now, I just want it in my back pocket to give me the option to call it quits, or at least to consider things like going part-time or cutting back on some responsibilities in exchange for lower pay.  Maybe later it will become imperative to quit, or given the freedom to quit I'll suddenly start enjoying the job more because I'll be completely immune to all the b-s stuff that freaks most people out.  That's already happened to a degree.  It's fantastic.

Another interesting response, thanks.. I am 48, I sort of FIRE'd at 47 but it was more due to life circumstances and considering a job especially with the markets in the last 3 days (today will be brutal) and the fact I haven't re-balanced my portfolio since FIRE wasn't my immediate plan a few months back.